After seeing X2, I was under the impression that Wolverine's story arc was completed. He found a home, he found a safe haven with people he could trust, he confronted his past, he decided he'd rather not dwell on it, and that he would rather take his chances with a new future, and start from scratch with people whose friendship and sincerity he knew was real. So that part of the story's over, now here is a chance for other characters to tell their stories.
You're right though, Cyke's character was obviously not seen as "sexy" by FOX's management, so they made a few changes here and there (more like turning the story upside-down) to put their hottest, sexiest character back into the forefront.